thank you for the kind words. I attempt to put what we read everyday in context. It's always gratifying to have kindrid spirits who are curious about how the world works and want to look under the hood.
I am a semi retired Australian farmer, who has had the unique opportunity to visit China regularly on wool business since 2007. The most recent visit wad when my Chinese textile friends took me to Inner- Mongolia, May 2024 to learn about the Cashmere industry.
Bin, your explanation of the US and China is brilliant.
China must have decided along time ago that it would not be secure until it was financially, economically and militarily more powerful than the US and the West.
We in the West foolishly interpret that as China becoming more agressive. That is an incorrect interpretation.
To understand US financialisation you have to go back to the The City of London, and the British Empire. The American's so hated George the 111 and Britian that they fought the War of Independence in 1783. Never the less the City of London never really lost.
This is demonstrated when in 1922, after the 1st World War, Montague Norman, Govenor of the Bank of England proclaimed " The future is in financial services, not lending to farmers and manufacturers". The tentacles of the City now extend to Wall Street and the FED.
None of us will be free until the tentacles of financialisation are destroyed.
China as you explain, has generated massive amounts of development capital from credit created by banks with lending controlled by the State, together with an ethos of national savings rather than consumption.
Of course Japan was the first to demonstrate what could be achieved by the Dept of Finance, issuing " Window Guidance" on where banks could lend in the economy. Only when Japan in the 1980s threatened the US to become the biggest world economy did the US step in and force Japan to "deregulate" which resulted in a diversion of bank investment to real estate and the inevitable 1991 crash.
I never miss an opportunity to warn Chinese to never let western banks into China.
this is an excellent point that is central to the different paths the two countries have taken.
financialization, advocated first by the English and the Rothchilds, is fundamentally the key to understand the political economy of the west today, especially the Anglo sphere led by the US and UK.
finance was always critical to the british empire since the 19th century. but when britain realized it lost industrial competitiveness after ww2, it decided to fully embark on a financialization path and the City of London, which is its own sovereign, is the central planner.
the financialization goes beyond legitimate business practices and has developed into the underground criminal economy. From offshore tax havens to money laundering, the british basically turned the country into the supernode of illicit financial transactions under the veneer of a respectable financial center. Its most profitable clients are mexican drug dealers, arab oil sheiks, russian oligarchs, african dictators, and a variety of arms dealers, criminal syndicates, etc.
there are some fascinating accounts of this including a book by Nicholas Shaxson called the Treasury Islands. Another example is an expose on YouTube about HSBC. https://youtu.be/twdydeMPIeE?si=92Su-juHo6ZIwJCG
Beijing is very aware of the Trojan Horse posed by global finance and that's why financial liberalization has been pursued with extreme caution.
With all of China's success in the last few decades kudos must be given to president Xi Jinping. the architect of many of China's achievement. Xi is a true champion of the common people. He periodically travels to various parts of China to assess the improvement of people's livelihood and order concrete action for further improvement. (You'll never hear a Western politician talk or act like this). He'll be a tough act to follow when he retires. Let's hope the Politburo will continue to be wise in choosing the next leader when the time comes.
I completely agree. President Xi has launched a set of demanding but fundamentally important policies - zero tolerance on corruption, clamp down of tech and real estate monopolies, pollution control, elimination of extreme poverty, Made in China 2025, Belt and Road Initiative, investmentin science and technology, and military modernization. He has also driven the revival of the Chinese civilizational confidence. Since he took office in 2013, the country has been transformed. It's more than getting richer but getting more powerful.
I wrote an essay titled 10 achievements of Xi Jinping last year (https://huabinoliver.substack.com/p/10-achievements-of-xi-jinping-598). If you want to know more about him, there is a new book publised this year titled Xi Jinping by Alfred Chan. It's quite a comprehensive biography.
As for his future successors, the central leadership is strictly based on a meritoracy and the bench is very deep so I am positive that a capable leader will be identified. Also the leadership is a collective one and not everything depends on one person. for example, Wang Huning, the 4th highest ranked official in China, has been the brain trust for 30 years working for Jiang, Hu and now Xi. Wang is responsible for the many of the most important policy directions.
That said, I agree Xi's leadership and impact as well as his personal charistma will be very hard to replicate. I think history will remember President Xi as a towering visionary and a transformative leader -an aspiration of every single Chinese ruler from time immemorial.
Yes Wang Huning. I think he is a highly significant figure. Deng Xiaoping was very impressed with America, and wanted to make China like the US. Wang Huning after he spent some time wandering around America as an academic understood the dangers of following America.
I credit Wang Huning from pulling China back to a different course. I wonder if Wang had played a role in keeping British and American banks out of China. If he has he has made a major contribution to mankind. He is close to all Chinese leaders but he never wants recognition. A Wonderful servant of the people .
indeed Wang is an unsung hero. He is a profound deep thinker who never likes to be in the center of attention.
as you said, he spent quite some time in the US back in 1988/9 and, though impressed with the technology and dynamism of the US, also found many issues facing the country. He wrote a book called America Against America, where he laid out his observations. It reads like a modern day alex tocqueville.
Wang is probably the most important influence in shaping the country's political path in the last 3 decades and I think history will validate his wisdom.
I have been planning to write about him for quite some time but high quality materials are hard to come by. Maybe one day, I'll do a short piece on his thoughts.
Great analysis! I have been reading a lot of Michael Hudson’s work lately, and as I was going through this I kept thinking to myself, “wow, this guy really gets it! I wonder if he’s read Hudson?”
Sure, enough! You cite him towards the end of the article.
And thanks for suggesting “Plunder: Private Equity's Plan to Pillage America” by Brendan Ballou. I will definitely check it out!
And I’ve also just subscribed to your Substack. I look foward to following your work.
thanks for the compliment. I am a fan of Professor Hudson for many years. He is the most perceptive economist in the west today and has done tremendous work to expose the true nature of the political economy in the west, especially the US.
my substack posts are a bit of a random walk on the subjects I am interested in which covers a range of unrelated topics. The main thing I want to do is to share little known facts or contrarian perspectives hard to find in mainstream media. I hope you'll be amused but don't have too high an expectation.
If you find sources on Wang Huning please let me know. I read America against America and it revealed little I thought. The interesting thing I think is whilst Wang was still an academic he got noticed by the political elite and after being given time to wander around America and their Universities he quickly gets promoted to the inner circle of the leadership. That in itself is a great strengths of the Chinese system .
I haven't taken notice recently but for a long time many photos of Xi at important events, had Wang hovering nearby in the background.
I admire China, and think it's doing a great job for the world and its citizens, but I was taken aback by one statistic in this article: "According to World Bank, by 2024, China accounted for 36% global manufacturing output, compared with 12% for the US."
Since, as of 2024, China had roughly 4.11 times as many people as the US, does this mean that the US is per capita more productive in industry than China? China would need to be at 49% of world output to match. How does that comport with the common wisdom that US industry is moribund, and China's is the opposite? Genuinely curious.
really great question. In my view, the reason for the seeming discrepancy comes down to a few things -
1. the US still has a high share of high value add industries such as aircraft, medicine, weapons, semiconductors that pull up per capita manufacturing production value.
2. the world bank statistic is based on the nominal dollar "value" of production, not "volume" of production. This is where price comes into play - the US is a high cost high price economy so its reported production "value" is not directly comparable with China's production value.
Let me give a few examples - 1) average car price in China is around half that of the US for the same quality or class of vehicles (even same model from the same brand, like Tesla or GM). 2) both the US and China has a reported $1.1 to $1.2 trillion in their respecitve annual GDP for the construction sector but China poured more cement in 3 years than the US did in the 20th century. China produces more than 11 times steel than the US. China's housing market is overbuilt (the western media loves to talk about the "ghost towns" with empty buildings while the US suffers a housing shortage. We don't even need to talk about the different construction levels of infrastructure. Clearly China has a vastly bigger construction sector than the US while the reported "value" is almost identical. 3) The US airforce openly admits its drones cost 5 or 6 times of comparable ones from China. The same ratio is probably true for any weapon systems.
while data about "volume" or "quantity" is much harder to get than nominal dollar "value", I think it's safe to assume the apple-to-apple comparison of China's productive capacity vs. the US is far more than 3 times. Instead I think the ratio is more likely 8 or 10 to 1 in China's favor.
Always look for the PPP, the purchase power parity, if you want abstract numbers.
But even better ist to look for tons and kWs. China is shadowing the rest of the world COMBINED in many crucial sectors, like energy, steel or infrastructure. It is really beyond imagination, those charts don’t document developments, they document explosions:
The USA/The West really doesn't exist, it is a slave state that labors under jewish predatory finance. And most American's are too groomed/stupid to understand their position. I try not to talk "politics" with most Americans' as I usually end up wanting to throw "acid" in their faces. There are a small group that are waking up, but sadly as a so-called country we are finished. We will end up as a "Brazil of the North".
this is what happens when the ruling class dumb down the population by replacing facts and logic with narratives and ideology. people's minds get permanently polluted and they focus on the petty, the irrelevant and the amazing rather than what affects their lives at a fundamental level. there is a reason why the jews take over media in addition to finance and extend from traditional media to digital media (Larry Page/Sergey Brin, Zuckerberg, Sam Altman, etc.). this is all in the Protocals of Elders of Zion.
The US is now a rentier society but once it was just as dynamic as China is now. I wonder whether the present state of China is not just a stage in its development.
At the moment China is exporting much more than it imports. It has to do something with that money. Now it is mainly passively investing in things like US treasury bonds. But that has its limits. If it follows the steps of Japan and the US the next stage will be foreign investments. But that will reach a limit too.
The final effect of treasury bonds and foreign investments is lots of passive income - a rentier society. The question is how China will handle that.
Another question is (un)employment. China still has some space to grow but soon enough it will find itself in the same place as the US in the 1930s: factories offer no longer enough employment. The American "solution" was to employ lots of people in the FIRE economy. What will China's solution be?
you raise a really good point. Is the path followed by the US inevitable for everyone? My thesis in the essay is no and China's biggest contribution is to show an alternative path is possible.
the reason I am making this assertion is several fold - first, I don't think it's a preordained that industrial capitalism has to be succeeded by finance capitalism. Government can play a major role regulating the economy and not all governments are prone to be captured by financial interest - I doubt anyone, even in the west, believe capitalists exert much influence on the Chinese government. In Chinese tradition, the central government or the imperial court in the past, is the sovereign and everything else is subject to the sovereign.
secondly, there are many ways to distribute the wealth created in the economy. The major issue in the west, especially the US, is unfair distribution and the resultant inequality and polarization. An activist government, especially socialist governments, can force more equitable distribution. There wasn't the concept of 1% in the US in the 50s or 60s. It was policy choice, influenced by the rich, that has led to the social economic problems the country faces today. That is a great lesson for China.
third, there are more productive ways to deploy capital than to buy US IOUs - in fact, China has reduced its Treasury holdings to the lowest level in more than a decade. Instead, the foreign reserve from its trade surplus is being invested in domestic infrastructure, belt and road initiative, and science and technology. Passive income from financing US debt is a death trap as the US can simply inflate the debt away by printing more money. Rentier income is derived from passive ownership of assets that generate monopoly profits. China's policy choices have been explicit about limiting monopolies and therefore the formation of rentier class. Note that the state itself owns the natural monopolies like utilities, telecom, infrastructure, and banking.
Wow! Great article! I think we will be all hearing more along these lines unless of course another Cold War comes along. I think the USA needs to learn to play nicely in the the sandbox.
What a far different world China is. It is difficult to imagine from an American perspective (or any western nation, for that matter) a government and financial system that actually works for the best interests of its people. I suppose one could say whether that is true or not depends on the definition of “its people.” Our society is based around Jewish perception of their interests, and unfortunately for most Westerners, Jews are unique amongst virtually any race in the world in that they view what is “best” for them is not only the prospering of their own but also the harm of all others. Of course, that makes sense a bit more when one considers that for them prosperity necessarily means the harm of others, as they have never been a people of production. Their entire history is filled with something very closely resembling what Hua Bin described as the current Western economic model, usury, the parasitic sucking of wealth and potential from those with whom they interact, a transfer of a population’s productive wealth to their ownership while diddling a few kids along the way.
It’s funny, I once was reading a legal corporations textbook, and there were some strange terms (to the average person) used that were unique to lingo of legalese within the world of corporations and the vast spiderweb of laws that constitute its rules and guidelines. There were footnote numbers next to such words, and in the footnote it stated “this word is Yiddish. Yiddish is the lengua franca of business.”
That also makes sense given such business men created a corporation that is a legal “person” that can own property, own other businesses, have constitutional rights, etc., and the owners of such corporations or their designated reps necessarily comprise the “brain” of such an entity. Of course, if the corporation runs itself into crazy debt and can’t pay, the owners are not personally financially liable, excluding relatively rare exceptions in which the “corporate veil” can be pierced. Lol
I hold a contrarian view on the US economy that is very similar to yours:)
contrary to popular myth (the US economy and politics is dysfunctional and not working properly), I think the system is working perfectly - for the people who designed it and benefits from it. It's just the system works for the very few at the expense of the very many, like General Smedley Butler described the war racket.
jewish control of the west, especially the US, can only be described as sublime and astonishly successful. A population of a small single percentage has captured the main commanding heights in the political economy from Wall Street, law, media, Hollywood, academia, high tech (think Palantir, Meta, OpenAI), the Fed, and the national security apparatus (Blinken, Wolfowitz, Kissinger, Nuland and many more). They also give the US Oxycotin (the Sacklers) and Jeffrey Epstein. The jewish elites are the primarily planners of the country's economic, political and foreign policies. These policies are working beautifully against its intended purposes.
I have a question to you as a Chinese economist and intellectual.
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As a European I am sadly convinced that there will be no upheaval against this US-shaped capitalism and vassalage in Europe. Europe has had its time. It’s over now.
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China will form the world‘s future. As a capitalist AND socialist nation. How this?
My answer: ONLY SO!
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China learned from the SU: you cannot develop Socialism if you do not have a superior economy. Otherwise they will destroy you.
Capitalism is the tool to get there.
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But it’s Chinese capitalism: no oligarchy, no power to big business. Similar to Russia, btw!
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This means: there will be no Socialism with powerfully western hegemony. So this hegemony has to be destroyed. To destroy western hegemony means: destroy the USA. Completely. Bc the USA will fight to the bitter end.
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Meanwhile China makes this:
- Nationalize big industries and finance to control them
- Hold capitalist away from power
- Narrow the income gap
- Spend all you can in education and science for all
- Develop the rural regions to avoid migration
- Bring birth rate to 2,3 for a stable population
- Teach people to take over responsibility and to participate in political processes.
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If all this will be achieved and the imperialist powers finally and ultimately destroyed worldwide we will have a chance to build a socialist or communist society.
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We don’t know what COMMUNISM will look like today. We don’t have to. We know the path towards it.
I agree with most of your points. Indeed, you are more explicit than I am. The action items you have mentioned to develop a true socialist, and eventually, communist system are indeed things China is doing from controlling finance, narrowing income gaps, to invest in education and even raise fertility rates.
I do believe the country is on the right track to achieve the goal of building a prosperous society for all instead of the few. I care less about what name people give to such a system than the substance, which is a better life for every member of the society.
I agree the US seems bent on containing China and provoking a war. Beijing's strong preference, in my view, is co-existence. Frankly, China simply never has a missionary mindset and historically believes the "middle kingdom" is a model that people can emulate if they choose to. But China is quite happy if others choose a different path. In this sense, China is different from both the west and the USSR. China doesn't advocate universalist values.
I wish the European ruling elite grow a spine to become a pole in the multipolar world and can balance the other powers. Europe has created amazing civilization and shouldn't be reduced to the sad state as it is today. It has to grow out of the zero-sum mentality of the colonizers and realize everyone can benefit from co-existence and collaboration. Of course, it has to liberate itself from the neoliberal ideological zealotry that seems to have prevailed over it.
by the way, I am not an economist despite having an economics degree. Most of my working career is as a tech executive. I am humbled to be called an intellectual. I happen to have some intellectual curiosity and have read a lot on a wide range of unrelated subjects - hence the random nature of my essays. I think of myself as an observer who wants to have serious discussions based on facts and data. Again, I appreciate your kind words.
I have just been reading Marx. He was talking of the revolutions to come - in the 19th century!
If he had known what suffering history had planned for the generations still to be born!
175 years later we restart to have hope, and this hope now lies on China.
The most developed, civilized and empathetic nation of the world claimes to create a society of free people sharing the wealth they produce. This is a long way to go. It is not the reality in China today.
But China is a Meritocracy. The CPC does not SERVE capitalist interests but USES them. For China. And it unites the smartes ppl out of 1,4 B.
That is something.
Most of my friends think China is the same like the USA, but worse. „Dictator“ and such bs.
But I wonder: what is the content and telos of a policy „for China“ - Dictator or not? What does the CPC want if not to maximize individual profits? What does it want if profit is just an instrument? Instrument for what?
There is only one answer: for the people.
The same answer was right for Lenin and the Bolsheviks btw.
But the SU had no chance to develop Socialism. It was existentially threatened from day one on.
Stalin had to prepare and win a war. The Cold War was the combined effort to extend and destroy the SU. It worked.
It does not work any longer. It is over. Imperialism is over. I believe we cannot overestimate what is the meaning of this. China is smarter - what is not so difficult as we can see…😅
When the imperialist nations start to understand - they still have no idea -, the amount of hatred and lies they throw on China will express their desperation.
You are right Marx would be surprised by the trajectory of history after his passing. He was expecting industrial capitalism to deliver more broad-based prosperity to societies and will gradually transition to socialism as the material base for such a transition gets ready. His vision, maybe somewhat utopian, was a society where everybody contributes and no one gets left behind. Still it's an inspiring vision compared with the inequality and polarization in much of the capitalist system today.
The finance capitalism the Anglo sphere evolved into has truncated the process Marx envisioned and the two world wars and the Cold War basically killed the momentum. But history is never static and, Marx would be surprised, that China has taken up the banner and is building a society that fits his vision. While still very much a work in progress, China's focus on building an economy that serves all rather than just a few is indeed a positive signal to people everywhere, as its success shows an alternative path is possible from the capitalism practiced in the west.
Most people in the west have been dumbed down by non-stop propaganda and disinformation. When you press on their views about China, you'll find most just regurgitate what is spoonfed to them by the dishonest media. A much more reliable source of information is from the people who have actually travelled to China and see for themselves what the country is like and whether their freedom is curtailed or the Chinese is suffering under "dictatorship".
Another source of information is to look at the survey of people's satisfaction with the government, conducted by objective western polls such as the Harvard Belfer Center or the Pew Research. They will be shocked to see the results starkly contrasting with the media narrative. But again, the population in the west is generally so dumbed down by the education system and the media that it's quite hopeless to try to persuade them logically.
I always enjoy the one-liner about western propaganda - "believe me, not your lying eyes." Amazing thing is it actually works:(
Only one point I would say in other words: Marx did not expect capitalism „to transit“ to socialism. He knew this has to be fought for by the proletariat, which is constantly divided from the wealth it is producing.
This fight was lost in Europe. It was lost in Germany 1918, and in Spain 1936. It was won in Russia and in China. It was terribly slaughtered in Indonesia or Chile. Today China is the ONLY nation where this success still prevails.
Western „Marxist“ and economists of all colors defy China being led by a COMMUNIST party. The true reason for this distrust is this: they don’t want to see China becoming the dominant power. But being the dominant power is inevitable to stop the plundering and suppression of the globe’s people.
indeed. Marx thought when people's basic needs are met, they become more class conscious and realize the inequality inherent in capitalism system and will demand changes, perhaps even though violent struggles. But it proved far more difficult and the capitalists and financiers fought teeth and nail to prevent a breakout of socialism from Latin America to Africa.
As for the so-called radical left in the west, they are generally more bark than bite. While they focus on critiquing and feeling morally superior, China is acting and building up a political economy towards socialism. I think China's most important contribution is to show other countries there is an alternative path to prosperity.
appreciate the compliment. All I do is to pull together what's openly available and try to put them in context. These days, one cannot count on the so called main stream media and even the "objective" academia to tell the meta story of our time without bias or manipulation. Facts speak louder than opinions. Opinions without facts are gaslighting.
I write to share data and ideas with the thinking readers, who are becoming a rare breed these days. For what's left of us, we need to stick together.
appreciate the kind words. The competing cities are fascinating even to us Chinese. The phenomenon has come into being literally in the last decade. As President Xi shifted from a focus on quantitative growth (raw GDP rates) to quality growth (where growth comes from), the local governments are forced to develop a different playbook - high-tech manufacturing rather than polluting legacy industries, differentiation based on local competitive advantages (e.g. local universities) rather than get-rich-quick real estate development, attracting talents rather than foreign investment.
Hefei, the superstar city in the Made in 2025 push, has leveraged its nationally prestigious University of Science and Technology and the talent pool into a magnet for innovation startups from EV, solar, biomed and quantum computing. Guizhou, a perpetual mountainous backwater in the southwest, took advantage of its year round low temperature and abundance electricty supply to get Huawei, Alibaba and even Apple to set up data centers.
Another thing is many next-gen mayors and provincial governors, in their 50s, are elite scientists and engineers with PhD degrees. For example, the Party Secretary of Shanghai used to the president of Tsinghwa Univeristy and an environment scientist with a PhD from the Imperial College. The former party head of Guizhou used to run the Aviation Industry of China and has a PhD in aerospace engineering.
ultimately, Beijing is building a meritocratic technocrat elite to lead its modernization drive. Maybe this is usual in global high tech corporations but a rarity in governments.
Thanks for the clarity. In other words Peter Thiel is the Grand Satan. Where oligarchs rule,monopolistic capitalism and neoliberalism prevail, it is a dead planet, a world of pure avarice. The wars being fought now are to protect the "nest eggs" of the oligarchs, a rather pathetic comment on our times
I think Thiel not as personally evil but a representative of his class - the tech finance oligarchy system itself is the fundamental problem with or without an individual like him. Thiel just perfectly disstills what the next-generation feudal lords look like.
of course, they will do anything to protect their wealth - hence the current capitalist system in the west is beyond reform. A revolution is only viable solution but I doubt the general population, dumbed down by propaganda and gaslighting for decades now, will have the awareness and stand up to the occasion.
Bin, Yes I know and agree, just cautious about what I write about our mother country. I still would.like to be able to leave Australia, particularly to visit my friends in China.
A tour de force! Thank you for this comprehensive exposition! Much appreciated!
thank you for the kind words. I attempt to put what we read everyday in context. It's always gratifying to have kindrid spirits who are curious about how the world works and want to look under the hood.
Outstanding essay Bin.
I am a semi retired Australian farmer, who has had the unique opportunity to visit China regularly on wool business since 2007. The most recent visit wad when my Chinese textile friends took me to Inner- Mongolia, May 2024 to learn about the Cashmere industry.
Bin, your explanation of the US and China is brilliant.
China must have decided along time ago that it would not be secure until it was financially, economically and militarily more powerful than the US and the West.
We in the West foolishly interpret that as China becoming more agressive. That is an incorrect interpretation.
To understand US financialisation you have to go back to the The City of London, and the British Empire. The American's so hated George the 111 and Britian that they fought the War of Independence in 1783. Never the less the City of London never really lost.
This is demonstrated when in 1922, after the 1st World War, Montague Norman, Govenor of the Bank of England proclaimed " The future is in financial services, not lending to farmers and manufacturers". The tentacles of the City now extend to Wall Street and the FED.
None of us will be free until the tentacles of financialisation are destroyed.
China as you explain, has generated massive amounts of development capital from credit created by banks with lending controlled by the State, together with an ethos of national savings rather than consumption.
Of course Japan was the first to demonstrate what could be achieved by the Dept of Finance, issuing " Window Guidance" on where banks could lend in the economy. Only when Japan in the 1980s threatened the US to become the biggest world economy did the US step in and force Japan to "deregulate" which resulted in a diversion of bank investment to real estate and the inevitable 1991 crash.
I never miss an opportunity to warn Chinese to never let western banks into China.
this is an excellent point that is central to the different paths the two countries have taken.
financialization, advocated first by the English and the Rothchilds, is fundamentally the key to understand the political economy of the west today, especially the Anglo sphere led by the US and UK.
finance was always critical to the british empire since the 19th century. but when britain realized it lost industrial competitiveness after ww2, it decided to fully embark on a financialization path and the City of London, which is its own sovereign, is the central planner.
the financialization goes beyond legitimate business practices and has developed into the underground criminal economy. From offshore tax havens to money laundering, the british basically turned the country into the supernode of illicit financial transactions under the veneer of a respectable financial center. Its most profitable clients are mexican drug dealers, arab oil sheiks, russian oligarchs, african dictators, and a variety of arms dealers, criminal syndicates, etc.
there are some fascinating accounts of this including a book by Nicholas Shaxson called the Treasury Islands. Another example is an expose on YouTube about HSBC. https://youtu.be/twdydeMPIeE?si=92Su-juHo6ZIwJCG
Beijing is very aware of the Trojan Horse posed by global finance and that's why financial liberalization has been pursued with extreme caution.
With all of China's success in the last few decades kudos must be given to president Xi Jinping. the architect of many of China's achievement. Xi is a true champion of the common people. He periodically travels to various parts of China to assess the improvement of people's livelihood and order concrete action for further improvement. (You'll never hear a Western politician talk or act like this). He'll be a tough act to follow when he retires. Let's hope the Politburo will continue to be wise in choosing the next leader when the time comes.
I completely agree. President Xi has launched a set of demanding but fundamentally important policies - zero tolerance on corruption, clamp down of tech and real estate monopolies, pollution control, elimination of extreme poverty, Made in China 2025, Belt and Road Initiative, investmentin science and technology, and military modernization. He has also driven the revival of the Chinese civilizational confidence. Since he took office in 2013, the country has been transformed. It's more than getting richer but getting more powerful.
I wrote an essay titled 10 achievements of Xi Jinping last year (https://huabinoliver.substack.com/p/10-achievements-of-xi-jinping-598). If you want to know more about him, there is a new book publised this year titled Xi Jinping by Alfred Chan. It's quite a comprehensive biography.
As for his future successors, the central leadership is strictly based on a meritoracy and the bench is very deep so I am positive that a capable leader will be identified. Also the leadership is a collective one and not everything depends on one person. for example, Wang Huning, the 4th highest ranked official in China, has been the brain trust for 30 years working for Jiang, Hu and now Xi. Wang is responsible for the many of the most important policy directions.
That said, I agree Xi's leadership and impact as well as his personal charistma will be very hard to replicate. I think history will remember President Xi as a towering visionary and a transformative leader -an aspiration of every single Chinese ruler from time immemorial.
Yes Wang Huning. I think he is a highly significant figure. Deng Xiaoping was very impressed with America, and wanted to make China like the US. Wang Huning after he spent some time wandering around America as an academic understood the dangers of following America.
I credit Wang Huning from pulling China back to a different course. I wonder if Wang had played a role in keeping British and American banks out of China. If he has he has made a major contribution to mankind. He is close to all Chinese leaders but he never wants recognition. A Wonderful servant of the people .
indeed Wang is an unsung hero. He is a profound deep thinker who never likes to be in the center of attention.
as you said, he spent quite some time in the US back in 1988/9 and, though impressed with the technology and dynamism of the US, also found many issues facing the country. He wrote a book called America Against America, where he laid out his observations. It reads like a modern day alex tocqueville.
Wang is probably the most important influence in shaping the country's political path in the last 3 decades and I think history will validate his wisdom.
I have been planning to write about him for quite some time but high quality materials are hard to come by. Maybe one day, I'll do a short piece on his thoughts.
Great analysis! I have been reading a lot of Michael Hudson’s work lately, and as I was going through this I kept thinking to myself, “wow, this guy really gets it! I wonder if he’s read Hudson?”
Sure, enough! You cite him towards the end of the article.
And thanks for suggesting “Plunder: Private Equity's Plan to Pillage America” by Brendan Ballou. I will definitely check it out!
And I’ve also just subscribed to your Substack. I look foward to following your work.
thanks for the compliment. I am a fan of Professor Hudson for many years. He is the most perceptive economist in the west today and has done tremendous work to expose the true nature of the political economy in the west, especially the US.
my substack posts are a bit of a random walk on the subjects I am interested in which covers a range of unrelated topics. The main thing I want to do is to share little known facts or contrarian perspectives hard to find in mainstream media. I hope you'll be amused but don't have too high an expectation.
If you find sources on Wang Huning please let me know. I read America against America and it revealed little I thought. The interesting thing I think is whilst Wang was still an academic he got noticed by the political elite and after being given time to wander around America and their Universities he quickly gets promoted to the inner circle of the leadership. That in itself is a great strengths of the Chinese system .
I haven't taken notice recently but for a long time many photos of Xi at important events, had Wang hovering nearby in the background.
I admire China, and think it's doing a great job for the world and its citizens, but I was taken aback by one statistic in this article: "According to World Bank, by 2024, China accounted for 36% global manufacturing output, compared with 12% for the US."
Since, as of 2024, China had roughly 4.11 times as many people as the US, does this mean that the US is per capita more productive in industry than China? China would need to be at 49% of world output to match. How does that comport with the common wisdom that US industry is moribund, and China's is the opposite? Genuinely curious.
really great question. In my view, the reason for the seeming discrepancy comes down to a few things -
1. the US still has a high share of high value add industries such as aircraft, medicine, weapons, semiconductors that pull up per capita manufacturing production value.
2. the world bank statistic is based on the nominal dollar "value" of production, not "volume" of production. This is where price comes into play - the US is a high cost high price economy so its reported production "value" is not directly comparable with China's production value.
Let me give a few examples - 1) average car price in China is around half that of the US for the same quality or class of vehicles (even same model from the same brand, like Tesla or GM). 2) both the US and China has a reported $1.1 to $1.2 trillion in their respecitve annual GDP for the construction sector but China poured more cement in 3 years than the US did in the 20th century. China produces more than 11 times steel than the US. China's housing market is overbuilt (the western media loves to talk about the "ghost towns" with empty buildings while the US suffers a housing shortage. We don't even need to talk about the different construction levels of infrastructure. Clearly China has a vastly bigger construction sector than the US while the reported "value" is almost identical. 3) The US airforce openly admits its drones cost 5 or 6 times of comparable ones from China. The same ratio is probably true for any weapon systems.
while data about "volume" or "quantity" is much harder to get than nominal dollar "value", I think it's safe to assume the apple-to-apple comparison of China's productive capacity vs. the US is far more than 3 times. Instead I think the ratio is more likely 8 or 10 to 1 in China's favor.
Always look for the PPP, the purchase power parity, if you want abstract numbers.
But even better ist to look for tons and kWs. China is shadowing the rest of the world COMBINED in many crucial sectors, like energy, steel or infrastructure. It is really beyond imagination, those charts don’t document developments, they document explosions:
Thanks for your informative reply.
The USA/The West really doesn't exist, it is a slave state that labors under jewish predatory finance. And most American's are too groomed/stupid to understand their position. I try not to talk "politics" with most Americans' as I usually end up wanting to throw "acid" in their faces. There are a small group that are waking up, but sadly as a so-called country we are finished. We will end up as a "Brazil of the North".
this is what happens when the ruling class dumb down the population by replacing facts and logic with narratives and ideology. people's minds get permanently polluted and they focus on the petty, the irrelevant and the amazing rather than what affects their lives at a fundamental level. there is a reason why the jews take over media in addition to finance and extend from traditional media to digital media (Larry Page/Sergey Brin, Zuckerberg, Sam Altman, etc.). this is all in the Protocals of Elders of Zion.
The US is now a rentier society but once it was just as dynamic as China is now. I wonder whether the present state of China is not just a stage in its development.
At the moment China is exporting much more than it imports. It has to do something with that money. Now it is mainly passively investing in things like US treasury bonds. But that has its limits. If it follows the steps of Japan and the US the next stage will be foreign investments. But that will reach a limit too.
The final effect of treasury bonds and foreign investments is lots of passive income - a rentier society. The question is how China will handle that.
Another question is (un)employment. China still has some space to grow but soon enough it will find itself in the same place as the US in the 1930s: factories offer no longer enough employment. The American "solution" was to employ lots of people in the FIRE economy. What will China's solution be?
you raise a really good point. Is the path followed by the US inevitable for everyone? My thesis in the essay is no and China's biggest contribution is to show an alternative path is possible.
the reason I am making this assertion is several fold - first, I don't think it's a preordained that industrial capitalism has to be succeeded by finance capitalism. Government can play a major role regulating the economy and not all governments are prone to be captured by financial interest - I doubt anyone, even in the west, believe capitalists exert much influence on the Chinese government. In Chinese tradition, the central government or the imperial court in the past, is the sovereign and everything else is subject to the sovereign.
secondly, there are many ways to distribute the wealth created in the economy. The major issue in the west, especially the US, is unfair distribution and the resultant inequality and polarization. An activist government, especially socialist governments, can force more equitable distribution. There wasn't the concept of 1% in the US in the 50s or 60s. It was policy choice, influenced by the rich, that has led to the social economic problems the country faces today. That is a great lesson for China.
third, there are more productive ways to deploy capital than to buy US IOUs - in fact, China has reduced its Treasury holdings to the lowest level in more than a decade. Instead, the foreign reserve from its trade surplus is being invested in domestic infrastructure, belt and road initiative, and science and technology. Passive income from financing US debt is a death trap as the US can simply inflate the debt away by printing more money. Rentier income is derived from passive ownership of assets that generate monopoly profits. China's policy choices have been explicit about limiting monopolies and therefore the formation of rentier class. Note that the state itself owns the natural monopolies like utilities, telecom, infrastructure, and banking.
Wow! Great article! I think we will be all hearing more along these lines unless of course another Cold War comes along. I think the USA needs to learn to play nicely in the the sandbox.
no bullies play in their own sandbox. that's why they are called bullies. generally they play by the rules after getting a bloody nose
What a far different world China is. It is difficult to imagine from an American perspective (or any western nation, for that matter) a government and financial system that actually works for the best interests of its people. I suppose one could say whether that is true or not depends on the definition of “its people.” Our society is based around Jewish perception of their interests, and unfortunately for most Westerners, Jews are unique amongst virtually any race in the world in that they view what is “best” for them is not only the prospering of their own but also the harm of all others. Of course, that makes sense a bit more when one considers that for them prosperity necessarily means the harm of others, as they have never been a people of production. Their entire history is filled with something very closely resembling what Hua Bin described as the current Western economic model, usury, the parasitic sucking of wealth and potential from those with whom they interact, a transfer of a population’s productive wealth to their ownership while diddling a few kids along the way.
It’s funny, I once was reading a legal corporations textbook, and there were some strange terms (to the average person) used that were unique to lingo of legalese within the world of corporations and the vast spiderweb of laws that constitute its rules and guidelines. There were footnote numbers next to such words, and in the footnote it stated “this word is Yiddish. Yiddish is the lengua franca of business.”
That also makes sense given such business men created a corporation that is a legal “person” that can own property, own other businesses, have constitutional rights, etc., and the owners of such corporations or their designated reps necessarily comprise the “brain” of such an entity. Of course, if the corporation runs itself into crazy debt and can’t pay, the owners are not personally financially liable, excluding relatively rare exceptions in which the “corporate veil” can be pierced. Lol
I hold a contrarian view on the US economy that is very similar to yours:)
contrary to popular myth (the US economy and politics is dysfunctional and not working properly), I think the system is working perfectly - for the people who designed it and benefits from it. It's just the system works for the very few at the expense of the very many, like General Smedley Butler described the war racket.
jewish control of the west, especially the US, can only be described as sublime and astonishly successful. A population of a small single percentage has captured the main commanding heights in the political economy from Wall Street, law, media, Hollywood, academia, high tech (think Palantir, Meta, OpenAI), the Fed, and the national security apparatus (Blinken, Wolfowitz, Kissinger, Nuland and many more). They also give the US Oxycotin (the Sacklers) and Jeffrey Epstein. The jewish elites are the primarily planners of the country's economic, political and foreign policies. These policies are working beautifully against its intended purposes.
I have a question to you as a Chinese economist and intellectual.
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As a European I am sadly convinced that there will be no upheaval against this US-shaped capitalism and vassalage in Europe. Europe has had its time. It’s over now.
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China will form the world‘s future. As a capitalist AND socialist nation. How this?
My answer: ONLY SO!
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China learned from the SU: you cannot develop Socialism if you do not have a superior economy. Otherwise they will destroy you.
Capitalism is the tool to get there.
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But it’s Chinese capitalism: no oligarchy, no power to big business. Similar to Russia, btw!
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This means: there will be no Socialism with powerfully western hegemony. So this hegemony has to be destroyed. To destroy western hegemony means: destroy the USA. Completely. Bc the USA will fight to the bitter end.
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Meanwhile China makes this:
- Nationalize big industries and finance to control them
- Hold capitalist away from power
- Narrow the income gap
- Spend all you can in education and science for all
- Develop the rural regions to avoid migration
- Bring birth rate to 2,3 for a stable population
- Teach people to take over responsibility and to participate in political processes.
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If all this will be achieved and the imperialist powers finally and ultimately destroyed worldwide we will have a chance to build a socialist or communist society.
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We don’t know what COMMUNISM will look like today. We don’t have to. We know the path towards it.
—
Please tell me where I am wrong?
Thank you!🙏
Alex,
I agree with most of your points. Indeed, you are more explicit than I am. The action items you have mentioned to develop a true socialist, and eventually, communist system are indeed things China is doing from controlling finance, narrowing income gaps, to invest in education and even raise fertility rates.
I do believe the country is on the right track to achieve the goal of building a prosperous society for all instead of the few. I care less about what name people give to such a system than the substance, which is a better life for every member of the society.
I agree the US seems bent on containing China and provoking a war. Beijing's strong preference, in my view, is co-existence. Frankly, China simply never has a missionary mindset and historically believes the "middle kingdom" is a model that people can emulate if they choose to. But China is quite happy if others choose a different path. In this sense, China is different from both the west and the USSR. China doesn't advocate universalist values.
I wish the European ruling elite grow a spine to become a pole in the multipolar world and can balance the other powers. Europe has created amazing civilization and shouldn't be reduced to the sad state as it is today. It has to grow out of the zero-sum mentality of the colonizers and realize everyone can benefit from co-existence and collaboration. Of course, it has to liberate itself from the neoliberal ideological zealotry that seems to have prevailed over it.
by the way, I am not an economist despite having an economics degree. Most of my working career is as a tech executive. I am humbled to be called an intellectual. I happen to have some intellectual curiosity and have read a lot on a wide range of unrelated subjects - hence the random nature of my essays. I think of myself as an observer who wants to have serious discussions based on facts and data. Again, I appreciate your kind words.
Thank you Hua.
I am very proud you agree to my view.
I have just been reading Marx. He was talking of the revolutions to come - in the 19th century!
If he had known what suffering history had planned for the generations still to be born!
175 years later we restart to have hope, and this hope now lies on China.
The most developed, civilized and empathetic nation of the world claimes to create a society of free people sharing the wealth they produce. This is a long way to go. It is not the reality in China today.
But China is a Meritocracy. The CPC does not SERVE capitalist interests but USES them. For China. And it unites the smartes ppl out of 1,4 B.
That is something.
Most of my friends think China is the same like the USA, but worse. „Dictator“ and such bs.
But I wonder: what is the content and telos of a policy „for China“ - Dictator or not? What does the CPC want if not to maximize individual profits? What does it want if profit is just an instrument? Instrument for what?
There is only one answer: for the people.
The same answer was right for Lenin and the Bolsheviks btw.
But the SU had no chance to develop Socialism. It was existentially threatened from day one on.
Stalin had to prepare and win a war. The Cold War was the combined effort to extend and destroy the SU. It worked.
It does not work any longer. It is over. Imperialism is over. I believe we cannot overestimate what is the meaning of this. China is smarter - what is not so difficult as we can see…😅
When the imperialist nations start to understand - they still have no idea -, the amount of hatred and lies they throw on China will express their desperation.
Prepare.
You are right Marx would be surprised by the trajectory of history after his passing. He was expecting industrial capitalism to deliver more broad-based prosperity to societies and will gradually transition to socialism as the material base for such a transition gets ready. His vision, maybe somewhat utopian, was a society where everybody contributes and no one gets left behind. Still it's an inspiring vision compared with the inequality and polarization in much of the capitalist system today.
The finance capitalism the Anglo sphere evolved into has truncated the process Marx envisioned and the two world wars and the Cold War basically killed the momentum. But history is never static and, Marx would be surprised, that China has taken up the banner and is building a society that fits his vision. While still very much a work in progress, China's focus on building an economy that serves all rather than just a few is indeed a positive signal to people everywhere, as its success shows an alternative path is possible from the capitalism practiced in the west.
Most people in the west have been dumbed down by non-stop propaganda and disinformation. When you press on their views about China, you'll find most just regurgitate what is spoonfed to them by the dishonest media. A much more reliable source of information is from the people who have actually travelled to China and see for themselves what the country is like and whether their freedom is curtailed or the Chinese is suffering under "dictatorship".
Another source of information is to look at the survey of people's satisfaction with the government, conducted by objective western polls such as the Harvard Belfer Center or the Pew Research. They will be shocked to see the results starkly contrasting with the media narrative. But again, the population in the west is generally so dumbed down by the education system and the media that it's quite hopeless to try to persuade them logically.
I always enjoy the one-liner about western propaganda - "believe me, not your lying eyes." Amazing thing is it actually works:(
I absolutely agree.
Only one point I would say in other words: Marx did not expect capitalism „to transit“ to socialism. He knew this has to be fought for by the proletariat, which is constantly divided from the wealth it is producing.
This fight was lost in Europe. It was lost in Germany 1918, and in Spain 1936. It was won in Russia and in China. It was terribly slaughtered in Indonesia or Chile. Today China is the ONLY nation where this success still prevails.
Western „Marxist“ and economists of all colors defy China being led by a COMMUNIST party. The true reason for this distrust is this: they don’t want to see China becoming the dominant power. But being the dominant power is inevitable to stop the plundering and suppression of the globe’s people.
indeed. Marx thought when people's basic needs are met, they become more class conscious and realize the inequality inherent in capitalism system and will demand changes, perhaps even though violent struggles. But it proved far more difficult and the capitalists and financiers fought teeth and nail to prevent a breakout of socialism from Latin America to Africa.
As for the so-called radical left in the west, they are generally more bark than bite. While they focus on critiquing and feeling morally superior, China is acting and building up a political economy towards socialism. I think China's most important contribution is to show other countries there is an alternative path to prosperity.
Great. In one sentence: all US investment is to concentrate existing wealth on ever fewer people.
Great article and analysis. Thanks for all your effort in educating us.
appreciate the compliment. All I do is to pull together what's openly available and try to put them in context. These days, one cannot count on the so called main stream media and even the "objective" academia to tell the meta story of our time without bias or manipulation. Facts speak louder than opinions. Opinions without facts are gaslighting.
I write to share data and ideas with the thinking readers, who are becoming a rare breed these days. For what's left of us, we need to stick together.
Excellent summary Bin, with some great stats to clarify the narrative. I was unaware of the competing cities element. Fascinating.
appreciate the kind words. The competing cities are fascinating even to us Chinese. The phenomenon has come into being literally in the last decade. As President Xi shifted from a focus on quantitative growth (raw GDP rates) to quality growth (where growth comes from), the local governments are forced to develop a different playbook - high-tech manufacturing rather than polluting legacy industries, differentiation based on local competitive advantages (e.g. local universities) rather than get-rich-quick real estate development, attracting talents rather than foreign investment.
Hefei, the superstar city in the Made in 2025 push, has leveraged its nationally prestigious University of Science and Technology and the talent pool into a magnet for innovation startups from EV, solar, biomed and quantum computing. Guizhou, a perpetual mountainous backwater in the southwest, took advantage of its year round low temperature and abundance electricty supply to get Huawei, Alibaba and even Apple to set up data centers.
Another thing is many next-gen mayors and provincial governors, in their 50s, are elite scientists and engineers with PhD degrees. For example, the Party Secretary of Shanghai used to the president of Tsinghwa Univeristy and an environment scientist with a PhD from the Imperial College. The former party head of Guizhou used to run the Aviation Industry of China and has a PhD in aerospace engineering.
ultimately, Beijing is building a meritocratic technocrat elite to lead its modernization drive. Maybe this is usual in global high tech corporations but a rarity in governments.
Thanks for the clarity. In other words Peter Thiel is the Grand Satan. Where oligarchs rule,monopolistic capitalism and neoliberalism prevail, it is a dead planet, a world of pure avarice. The wars being fought now are to protect the "nest eggs" of the oligarchs, a rather pathetic comment on our times
I think Thiel not as personally evil but a representative of his class - the tech finance oligarchy system itself is the fundamental problem with or without an individual like him. Thiel just perfectly disstills what the next-generation feudal lords look like.
of course, they will do anything to protect their wealth - hence the current capitalist system in the west is beyond reform. A revolution is only viable solution but I doubt the general population, dumbed down by propaganda and gaslighting for decades now, will have the awareness and stand up to the occasion.
Bin, Yes I know and agree, just cautious about what I write about our mother country. I still would.like to be able to leave Australia, particularly to visit my friends in China.
I agree with Richard V. It’s helpful to have this sort of perspective.